The Democrats on the Deficit

November 5, 1985

YOU CAN TELL who's ahead on points at any given moment in the Gramm-Rudman debate on deficit reduction by where the squeals are coming from. By that and other standards, the Democrats had a pretty successful week last week. They moved through the House a version of the controversial plan that would:

*Create an early test of true intentions on all sides by taking a cut at the deficit right away, instead of deferring the serious cutting until after next year's elections, as would the Senate version.

*For equity's sake, exempt from cuts not just Social Security, as would the Senate version, but the main forms of federal sustenance for the poor.

*Provide a mechanism to fine-tune the deficit target each year, to guard against too great a cut in a weakening economy.

*Clear up assorted procedural questions that the Senate, in its haste to go on record in favor of a balanced budget, left unresolved.

But what the House version really left clear was the choice that would be created by Gramm-Rudman. To the Senate Republicans who thought it up, the amendment was mostly a way out of fiscal embarrassment. The budget deficits of the Reagan presidency have brought a doubling of the national debt to just over $2 trillion in the last five years. Gramm-Rudman -- which on paper would require the president and Congress to reach a balanced budget within five years -- was attached to the bill authorizing the Treasury for the first time to have more than $2 trillion in debt outstanding. While voting to finance the policy of the last five years the Senate was also able to promise to reform.

What got lost in the Senate debate was that Gramm-Rudman would almost certainly require either a tax increase or a serious cut in defense spending. That either/or aspect of the proposal was glossed over both by Senate conservatives and by the White House after the president endorsed the amendment. Now, however, the House has clarified and accentuated the math of the amendment, and the administration and congressional Republicans have begun to wobble.

The secretaries of state and defense have sent the president a letter warning him that Gramm- Rudman threatens both his defense buildup and foreign economic policy. The congressional Republicans have meanwhile moved to alter their version so that there would be an appreciably smaller cut than before in defense; the slack would be taken up by Medicare. The Senate will be asked to adopt this dubious afterthought this week.

Gramm-Rudman has always been about three- quarters gamesmanship, and continues to be. The Democrats who sharpened it last week and a lot of Republicans who have embraced it as well will freely acknowledge that is bad law (the Democrats all but invited the courts to throw it out) and proof of procedural bankruptcy. It wins for lack of an alternative. Increasingly the problem in the last few years has been to make this president choose between the lower taxes and higher spending, particularly for defense, that are both parts of his program. His refusal to do so is what Gramm-Rudman is ultimately about.